Nexi S.p.a. · MIL:NEXI

Nexi — Q1 2020 Earnings Presentation

25 slides from Nexi's earnings presentation, May 12, 2020

  1. Slide 1: 1Q 2020 Results Presentation

    nexi 1Q 2020 Results Presentation May 12th, 2020 1

  2. Slide 2: Disclaimer

    Disclaimer  This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations,

  3. Slide 3: Executive Summary: Covid-19 update

    Executive Summary Covid-19 update  After ~2 months of lockdown in Italy, one of the strictest in Western Countries, on May 4th Phase 2 started with a gradual easing of lockdown measures. Several government initiatives to support businesses and families being executed  Full business continuity and

  4. Slide 4: Executive Summary: 1Q20 results highlights

    Executive Summary 1Q20 results highlights  EBITDA +3.9% y/y growth, at 115.0 €M in 1Q20  Revenues -0.5% y/y growth, at 225.3 €M in 1Q20 Key business initiatives  Merchant Services & Solutions (47% of Revenues): new partnerships to accelerate E-commerce for SMEs (e.g. Italiaonline), launch of Pay-

  5. Slide 5: Covid-19 situation improving, Phase 2 started in May

    Covid-19 situation improving. Phase 2 started in May with gradual easing of lockdown measures and material government interventions to support recovery Evolution of Active Positives and Intensive Care Cases in Italy “Phase 2” Key Dates Lockdown across all “Cura Italia” “Liquidità” Start of Lombardy

  6. Slide 6: Ensured full business continuity while safeguarding health and safety of employees

    Ensured full business continuity and highest efficiency of service, while safeguarding health and safety of all employees  Creation of a dedicated crisis management task force in place since day1 with Executive Committee supervision Swiftly implemented  Definition and implementation of an emergenc

  7. Slide 7: Launched several customer and social initiatives to support Italy through the crisis

    Launched several customer and social initiatives to support Italy through the crisis Customer Initiatives Social initiatives E-commerce for SMEs Support to Italian Institutions  All physical contracts already extended to e-commerce (XPay360)  Partnerships to offer easy website development/ payment

  8. Slide 8: Resilient business model with 50+% revenues not impacted by volumes

    Resilient business model with 50+% revenues not impacted by volumes and 38% variable and semi-variable costs Revenues breakdown1 Operating costs breakdown1 Volume driven revenues Installed-base driven revenues Variable costs Fixed costs 9% 20% external processing 41% 64% 48% 52% 91% 38% 59% 62% 36%

  9. Slide 9: Transaction volumes decreasing since end of February, stabilizing at ~-50%

    Transaction volumes decreasing since the end of February, now stabilizing at ~-50%. E-commerce declined less sharply compared to physical sales Acquiring transaction volumes - 7-days rolling % change Y/Y Transaction volumes (incl. Cash) Ecommerce sales 35.0% 34.3% 24.9% 22.8% 19.1% 20.0% 15.0% 13.9%

  10. Slide 10: Volume decrease driven by discretionary spending; e-commerce acceleration

    Volume decrease driven by high-impact and discretionary spending while growing in basic consumption. E-commerce acceleration outside travel and tourism Acquiring volumes by category1 Product category % change Y/Y Jan + Feb March Apr Last week rolling 2 44% for 37% for Basic consumption 15% 13% 11% 1

  11. Slide 11: Nexi accelerating product plans for "new normal" customer needs

    Nexi accelerating product plans, in anticipation of “new normal” customer needs Observed/expected trends  Large and mid-size merchants accelerating on  Accelerated online purchasing  B2B payments going more digital, (checks omnichannel decreasing,..)  Increased consumer focus on security and  S

  12. Slide 12: Focus on 1Q20 Results

    Focus on 1Q20 Results od N VAL

  13. Slide 13: Resilient Net Revenues and positive EBITDA performance

    Resilient Net Revenues and positive EBITDA performance, despite the deterioration in March due to lockdown measures Net Revenues (€M) EBITDA (€M) -0.5% 226.5 225.3 Margin 49% 51% 3.9% 115.0 110.6 1Q19 1Q20 1Q19 1Q20 13

  14. Slide 14: Merchant Services & Solutions: ~40% of revenues not impacted by Covid-19

    Merchant Services & Solutions: ~40% of revenues not impacted by Covid-19 Net Revenues (€M) Managed Transactions (#M) Key Highlights 47%1 International Schemes 0.9%  Managed transactions sustained by International Schemes growth (+0.9% -0.9% -4.5% y/y) 106.1 105.1 790 754  Value of managed transact

  15. Slide 15: Cards & Digital Payments: ~60% of revenues not impacted by Covid-19

    Cards & Digital Payments: ~60% of revenues not impacted by Covid-19 Net Revenues (€M) Managed Transactions (#M) Key Highlights International 41%1 Schemes 5.4%  Managed transactions sustained by International Schemes growth (+5.4% 0.4% -0.4% y/y) 609 611 93.0 92.6  Value of managed transactions Car

  16. Slide 16: Digital Banking Solutions: marginally impacted by Covid-19 lockdown

    Digital Banking Solutions: marginally impacted by Covid-19 lockdown in March Net Revenues (€M) Key Highlights 12%1  Self-banking: Continued rollout of new higher value +0.8% advanced self-banking products/solutions and 27.6 continued growth of advanced ATMs installations 27.4  Digital Corporate Ba

  17. Slide 17: Costs: variable costs and discretionary measures to mitigate Covid-19

    Costs: variable costs and discretionary measures to mitigate the financial impact of Covid-19 Total Costs (€M) Key Highlights Decrease in total costs mainly driven by: -4.8%  variable costs linked to volumes/activities 115.9 (processing costs, external contact center, Personnel Costs 110.3 Y/Y mark

  18. Slide 18: Strong cash position. Net Financial Debt / EBITDA at 2.8x

    Strong cash position. Net Financial Debt / EBITDA at 2.8x Net Financial Debt (€M) Key Highlights Current Debt structure: Dec 18 Mar 19 Dec 19 Mar 20  1 €B Term Loan due 2024  825 €M Fixed-Rate Note due 2024 Gross Financial Debt 2,605 2,656 1,840 1,843  Other residual debt (mainly IFRS 16) Nexi al

  19. Slide 19: Pro-forma for ISP's Merchant Acquiring acquisition

    Pro-forma for ISP’s Merchant Acquiring acquisition Net Revenues and EBITDA both growing Net Revenues (€M) EBITDA (€M) Update on the transaction  Process on track, closing date expected by summer 2020 1.0% 247.6 250.1  Cash flow generated by the acquiring book from Jan 1st 2020 to closing will be 6

  20. Slide 20: 2020 revenues dependent on recovery; 100+ €M cost containment plan

    2020 revenues evolution dependent on Covid-19 crisis recovery. 100+ €M cash cost containment plan in execution to mitigate EBITDA and cash flow impact 100+ Revenues Cost containment plan €M Volume-base costs Discretionary spending Volume-driven revenues  Personnel expenses Operating Expenses Capex

  21. Slide 21: Financial guidance conservatively suspended

    Financial guidance conservatively suspended Previous Guidance1: suspended Key considerations Net Revenues 5-7% annual net revenue growth over medium term, targeting  2020 volume-driven revenues depending on higher end of the range the duration of the peak, speed of recovery and dynamics by sector.

  22. Slide 22: Q&A

    Q&A 22

  23. Slide 23: Annex

    Annex 23

  24. Slide 24: P&L 1Q19 1Q20

    P&L Δ% vs. 1Q19 1Q20 €M 1Q19 Merchant Services & Solutions 106.1 105.1 -0.9% Cards & Digital Payments 93.0 92.6 -0.4% Digital Banking Solutions 27.4 27.6 +0.8% Operating revenue 226.5 225.3 -0.5% Personnel & related expenses (41.7) (40.0) -4.1% Operating Costs (74.2) (70.4) -5.2% Total Costs (115.9)

  25. Slide 25: Investor Relations

    Investor Relations investor.relations@nexi.it Stefania Mantegazza stefania.mantegazza@nexi.it 25

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